June 26, 2012

Russia's 2012-13 grain crop, export forecasts down on hostile weather

Due to winterkill and spring drought which caused yields to fall, Russia's Agriculture Ministry and a leading analyst slashed their 2012-13 grain crop and export forecasts on Monday (June 25).

For the new season the ministry cut its 2012-13 wheat crop forecast to 46-49 million tonnes from 57 million tonnes expected earlier, a government source said. The wheat export estimate was cut to 16-18 million tonnes from 20 million tonnes, the source added.

The ministry expects Russia to harvest 85 million tonnes of grains including legumes, agriculture minister Nikolai Fyodorov was quoted as saying by his spokesman.

The new ministry estimate is preliminary and may be raised if the weather is favourable during the harvest, the source added.

In early June the ministry expected Russia's 2012-13 grain harvest to be flat on-year, when it stood at 94 million tonnes. Since then a spring drought caused yields to fall and prompted analysts to cut their forecasts.

European wheat futures surged to a one-year high on Monday (June 25), boosted by reduced prospects for grain crops in both the US and the Black Sea region, while weekend showers also heightened quality concerns in France.

Meanwhile rains and lower temperatures normalised conditions for Russia's spring wheat after a fresh heat wave in its grain growing regions, the state crop weather forecaster said on Monday.

SovEcon agricultural analysts cut Russia's 2012-13 wheat export forecast to 11 million tonnes from 13.5 million tonnes, SovEcon Chief Executive Andrei Sizov Sr. told Reuters on Monday.

He expects 2012-13 grain crop to reach 83 million tonnes, of which wheat may account 48.5 million tonnes and barley - 1.5 million tonnes. The country's grain domestic consumption is expected "at 72.7 million tonnes for this year, the next agricultural year," Fyodorov was quoted as saying by the news agency Interfax.

This means that "the country's grain export potential is not lower than 20 million tonnes", down from this years about 27 million tonnes, minister said, adding that export restrictions, which the country used after the 2010 drought, will not be an issue this year.